Why we need to treat our small-scale farms as businesses

Why do you farm?

When you ask a small-scale farmer this question, they often don’t say because they want to make money. Farmers love what they do. Whether, they do it because it’s in their family and they have a connection to the land, or they want to be able to produce food for themselves and their community – farming is extremely rewarding. You put a lot of effort in, and can see the tangible results of your effort. In other words, you plant a seed, tend to it, and one day you’ll get to enjoy the product!

As a non-farmer it may seem hard to grasp why people farm. It is extremely hard work. It’s labour intensive, time consuming and ongoing – it’s hard to take a day off! If you don’t work, the farm doesn’t run.

Yet, the hard work is worth it! Farming benefits those around it:

By practicing responsible agricultural practices that help feed the land that feeds us,

By teaching those around you about where their food comes from,

And by connecting cultures and sharing traditions over the universal love for food.

Farming does all of those great things for those around it, yet we must not forget, farming is also a business. There are costs and profits, employees and management, customer acquisition and marketing.

When you think of a farming business – what do you see? For me, I think of a large-scale operation owned by a huge corporation that does mass production of wheat or legumes using large processing machines. I don’t usually think of a smaller local producer growing a variety of seasonal vegetables or a rancher using pasture rotation to graze their cattle.

So, how come small scale farming hasn’t been seen as a business?

Farming is directly tied to one’s livelihood. Not in all cases, but often farmers live on the properties that they farm, and spend day in day out producing food. It is ingrained into every aspect of their lifestyle. Every action and decision is based on production. How much can I produce and what can I do to make it the best?

Don’t get me wrong – this is a great thing. It means farmers put everything into the products they produce, they respect the land and animals they use, and ultimately produce the best type of food – yet sometimes this may just be enough to survive, but not thrive.

Additionally, local food isn’t that accessible. For a consumer it’s hard to buy direct from a producer, so they often do the transaction with a middle-man like a grocery store. In a consumers eyes, a farmer has a lifestyle instead of a business.

According to Modern Farmer, only 41% of small-scale farmers turn a profit each year in the US. This means that the majority of farmers fail to break even and that 64% of small farmers have a second job to support their business. As mentioned above, small-scale farmers provide many benefits to their communities, so how can it be that many of them are struggling to survive? This is a huge problem.

So, what can we do?

Often so much time and effort is put into creating the product, instead of essential aspects such as risk mitigation and management, costs and profits, improvements to tools and practices, and goal planning and achieving. When all your time is spent devoted to production, you are missing out the opportunity to run your business efficiently and increase the likelihood of continuous production in the future.

In every business, there are two essential practices: organization and operation.

Organization involves planning for the near and distant future, aggregating and acquiring tools and resources needed, and tracking and analyzing your results. On the other hand, operation is the day-to-day tasks that occur in order to meet business goals. These practices are just as important for the business to thrive; however the order in which they are practiced is essential. Organization first, operation second. You can work as hard as you want, but if you have no way of tracking it, then you’re left unsure if you work has paid off.

By treating your farm as a business, you spend time on the organization side of your production. Taking time to organize, and set goals for the future creates a plan so that every action, every decision made in the future will lead you towards why you farm. You can’t succeed if you don’t know where you are headed.

Based on the current market, there are three things that need to happen in order for small-scale farmers to thrive:

1. Increasing the accessibility of local food to the market

2. Marketing the products to a consumer-driven market

3. Goal-setting and financial planning for the future

Small-scale farmers need access to competitive markets. They need to be able to reach their target audiences and have the ability for easy, comparable transactions to their competitors (grocery stores). In other words, they need to make ordering and receiving their products as a consumer easy and cost-efficient.

Next, farmers to need to market their products. They need to follow consumer trends and use online mediums such as social media to inform their target audience they’re an option. Buying local food needs to become a norm – and the farmers need to show consumers why it needs to be.

Finally, farmers need to plan and track these actions by creating business plans, financial models, and marketing strategies. The combination of these three things will allow for the transition from lifestyle to business achievable.

This process won’t happen overnight – it will take time, effort, and critical thinking in order to create something that works specifically for your business however, in the long run, it will be worth it. So let us leave you with some food for thought – instead of farming harder, try farming smarter.

Wondering where to get started? We can help – we compiled a free guide to help food producers and small-scale farmers sell their food online. It outlines who to sell to, how to sell to them, and where to get started. Click here to read your free copy!